Not surprisingly then, in 2013, the US overtook Russia as the world's leading energy producer. Then, in 2014, America actually surged past Saudi Arabia as the world's biggest producer of crude oil!
So who has America's energy renaissance hit the hardest? Russia and Saudi Arabia.
No two nations in the world have seen their GDP hit harder, because of the global oil glut, than Russia and Saudi Arabia. Just look what happens to these two countries when oil prices drop like a rock. The value of Russia's ruble has been cut in half. Its stock market is down by a third since 2011. Russia is flat-out running out of money. It MUST do something. And fast. And what it plans to do, with Saudi and Chinese help, is cut America -- and the petrodollar -- out of the global economic picture. President Vladimir Putin expects to see the petrodollar die, admitting publicly, "the dollar monopoly in the energy trade is killing Russia's economy."
Russia has held secret talks with China to devise a plan for striking back at the US. It's held talks with Iran, too, as it looks for new alliances. Without Saudi Arabia joining them though, Russia and China would find it difficult to cut the US out. But now, as already stated, Saudi Arabia and its OPEC partners are having their fair share of troubles too. Their profit margins have plummeted 22.6% since 2011. In fact, Standard & Poor's (S&P) recently lowered its Saudi Arabia credit rating from 'positive' in mid-2014, to 'neutral' in late 2014. to negative in 2015. "The outlook reflects our view that Saudi Arabia's general government fiscal position is weakening," said S&P.
For the time being, however, Saudi Arabia refuses to cut production and give up market share to the Americans. And that means a glut of oil on the market, which results in falling gasoline prices, and smaller profits for all oil companies.
Saudi Oil Minister Ali al-Naimi couldn't hide his frustration with the US when he publicly stated, "Whether it (the price of a barrel of oil) goes down to $20, $40, $50, $60, it is irrelevant. It is not in the interest of OPEC producers to cut their production, whatever the price."
Increasingly, therefore, we're seeing Saudi Arabia lash back at America. It doesn't appreciate being hampered by still having to trade with US dollars, when all the while the US is flooding world markets with her own cheap oil.
Until now, Saudi Arabia has maintained a very close relationship with the US -- NOT ONCE since 1973 has it been willing to fully retaliate against America. After all, the US has long been its biggest customer and fierce military protector. But as we've seen, the US is now producing enough energy within its own borders that it doesn't need much Saudi oil anymore. In fact, US oil imports from Saudi Arabia fell off by more than ONE-THIRD over a four-month period in 2014 alone.
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